Certification of Bank Checks

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THE

AMERICAN LAW REGISTER.

MARCn, 1888.

CERTIFICATION OF BANK CHECKS.

Our article will be divided into the following heads :
I. — General rules applicable to the certification of all bank

checks.
II. — Rules applicable to a bank check that has been certified on

the request of the payee, or subsequent holder.
III. — Rules applicable to a bank check that has been certified

on the request of the drawer.

I. — General rules applicable to the certification
OP all bank CHECKS. Many of these rules will require little
or no comment beyond their bare statement, as the law stated in
them is undisputed, while upon others have arisen most of the
differences between the various courts.

What amounts to the certification of a bank check. In general it
may be stated that no particular form of words is necessary to
the certification of a check, nor need it be even in writing.
Any language, verbal or written, used by the bank signifying
to the person presenting the check that it is good and will be
paid when presented for payment amounts to a certification :
Pope v. Bank of Albion, 59 Barb. 226 ; Espy v. Bank of Cin-
cinnati, 18 Wall. 604; Nelson v. First Nat'l Bank, 48 111.
36. It is clearly settled that there is no difference in this re-
spect between a bill of exchange and a check ; and whatever
in the case of a bill amounts to an acceptance will in the
case of a check be treated as a certification. To effect a
certification does not even require language on the part of the
Vol. XXXVI.-19 " (141)

142 CEKTIFICATION OF BANK CHECKS.

bank, but the end may be accomplished by conduct and what
conduct is to be considered as amounting to an acceptance or
certification is determined by the rules applicable to bills of
exchange: Colorado Nat'l Bank v. Boettcher, 5 Colo. 185.
Whether the conduct of the bank in a particular case is such as
to amount to an acceptance is a question properly left to the
jury ; Northumberland Bank v. McMichael, 106 Pa. St. 460.
The usual method of certification is in the cashier or teller
writing the word " good " across the face of the check, together
with his name and official title, and, in many instances, a simple
stamp is used fortius purpose by the bank. The courts have
nearly all regretted the rule that allows bills of exchange to be
accepted by parol, but it is well established, except where
changed by statute, and it has been extended to the certification
of checks. The effect of this disposition to regret verbal ac-
ceptances will probably be to cause courts to construe strictly,
and limit, as far as possible, verbal certifications of checks:
Espy v. Bank of Cincinnati, 18 Wall. 604 ; Clews et al. v.
Bank of N. Y. Nat'l Banking Ass'n, 89 N. Y. 418 ; s. c, sec-
ond appeal, 105 Id. 398.

Undertaking of the bank on certifying a check. We have had
a number of decisions as to the undertaking of the bank on cer-
tifying a check, all more or less different ; but with a leaning
which indicates that, in all probability, the analogy to bills of
exchange will be continued, and the certifying bank held to no
greater liability than the acceptor of a bill. In two States the
question has been authoritatively settled by the courts of last
resort, while in the Federal Courts a decision by the Supreme
Courts leaves the matter in grave doubt as to what will be the
view there taken. The cases that have arisen are upon the
liability of a bank that certifies a check as good, the amount of
which has been raised since its delivery by the drawer and be-
fore its presentation for certification. In New York it is settled
law that the certification of a check in the usual form simply
affirms the genuineness of the signature of the drawer and that
he has funds sufficient to meet it, and engages that they will not
be withdrawn to the prejudice of the holder of the check, but
does not warrant the genuineness of the body of the check :
Marine Nat'l Bank v. Nat'l Oily Bank, 59 N. Y. 67;

CERTIFICATION OF BANK CHECKS. 143

Security Bank v. Nat' I Bank, 67 Id. 458; Clews et al. v.
Bank of N. Y. Nat'l Banking Ass'n, supra. The bank is not
held bound to pay the check when the amount has been raised
before certification ; and to hold it to any greater liability than
thus laid down, the form of certification must be so changed as
to indicate the additional undertaking ; Marine Nat'l Bank
v. Nat'l City Bank, 59 N. Y. 67.

In Louisiana, on the other hand, under the same state of
facts, exactly the contrary doctrine was held, and the certifying
bank was made liable for the genuineness of the entire instru-
ment : Louisiana Nat'l Bank of N. 0. v. Citizens' Bank of
Louisiana, 28 La. An. 189. This case was decided after that
of the Marine Nat'l Bank v. T/ie Nat'l City Bank in New
York, and an attempt was made to distinguish between the
two, but without any foundation, as shown by the later New
York decisions. So that it may be considered that there is a
direct conflict of authority between courts of the two States.
These are the only States that have, as yet, passed upon this
point.

In the Federal Courts a middle ground appears to have been
taken, holding with the New York court in the case of a verbal,
and with that of Louisiana in the case of a written, certification :
Espy v. Bank of Cincinnati, 18 Wall. 604. The only point
actually decided by the court was in regard to the effect of a
verbal certification, and as to this it held, in entire accord with
the New York courts, that the bank was held only to a knowl-
edge of the drawer's signature and the state of his account.
And while the court expressly made no decision as to the effect
of a written certification in the usual way, the fact that a dis-
tinction between written and verbal certifications was made at
all and the reasoning employed in its making, together with the
dicta as to the effect of the written undertaking, all plainly show
that the opinion of the court leaned to what we may term the
Louisiana doctrine upon this point. It seems that the court was
in favor of making the bank a warranter of the value of the
check as it came from its hands ; but, regretting that the bank
should be liable at all upon a verbal certification, determined to
limit this liability as much as possible.

In New York the rule was settled after the case of Espy v.

144 CERTIFICATION OF BANK CHECKS.

Bank of Cincinnati was decided, and the leading cases expressly
repudiate any distinction between verbal and written certifi-
cations : Marine Natl Bank v. Nat'l City Bank, 59 N. Y. 67.
But some late cases would seem to show that a distinction is to
be made to some extent, and the bank not to be held to as great
care in the one as in the other. Clews et al. v. Bank of N. Y.
Nat'l Banking Association, supra, Danforth and Tracy, JJ.,
dissenting.

It would seem that if the courts are to be governed by princi-
ple alone, and at the same time by the settled maxims of the law,
they must give the verbal the same effect they do to written cer-
tifications, and not accord to either any greater force than is given
to the acceptance of a bill of exchange, which is to make the
acceptor liable for the signature and not the body of the bill ;
but the uncertain position of the" Supreme Court of the United
States and the effect its decisions may have upon the State courts
leaves the matter in some doubt.

Forgery of certification. All the rules of forgery applicable
to bills of exchange will probably be extended to the certifica-
tion of checks. Some havejust been noticed and others remain
to be determined. If the certificate of the bank be forged and
the check be then presented to the teller to ascertain if the cer-
tification is genuine, and he responds that it is, the bank is
bound by the admission. Continental Nat'l Bank v. Nat'l
Bank of the Commonwealth, 50 N. Y. 575. But if the amount
of the check be raised after certification and it then be pre-
sented to the teller to ascertain whether it be genuine and he
answers that it is, the answer is supposed to relate only to the
certifying marks and not to the amount, and the bank will only
be bound to the sum for which it lawfully certified : Clews v.
Bank of N. Y. Nat'l Banking Association, supra. It is a ques-
tion for the jury, however, in such case whether the teller be
guilty of negligence for failing to compare such certification
with his book of certified checks, and thus avail himself of all
the information within his reach : Clews v. Bank of N. Y. Nat'l
Banking Association, supra.

Certifications that are not binding on the bank. To innocent
bona fide holders the bank will always be liable to the extent of
its undertaking for checks which it sends forth properly certified,

CERTIFICATION OF BANK CHECKS. 145

although, as against the drawer or the party presenting it for
certification it might have been able to stop payment. But if
the check be not properly certified and carries on its face suffi-
cient evidence to give notice to every one into whose hands it
may come and put them upon inquiry, the bank will not be lia-
ble to any subsequent holder, if in the first place it was not
bound Thus, if the certifying words be signed by an officer
whose official designation attached to his name shows him to be
one who has not authority, virtute officii, to certify checks, the.
bank will not be liable to a holder if it had not previously
granted this authority expressly or impliedly : Pope v. Bank
of Albion, 57 N. Y. 127. Or if the proper bank officer certifies
one of his own checks, the certification will not be binding on
the bank, on the theory that a trustee is not at liberty to deal
with the subject-matter of his trust to his own benefit ; and the
fact that the names of the drawer and the party certifying are
the same is sufficient notice to all holders: Claflin v. Farmers'
and Citizens' Bank, 25 N. Y. 293. So if the check be post-
dated it carries on its face, until the day named actually arrives,
warning to all parties : Clarice Nat' I Bank v. Bank of Albion,
52 Barb. 593. If the check recites on its face that it is to be
held as collateral, a certification will not bind the bank, as it is.
wholly outside its business to become security for the perform-
ance of collateral duty by the payee, and carries this evidence
to all parties into whose hands it may come : Dorsey v. Abrams,
85 Pa. St. 299.

In case the drawer has no funds and the bank certifies a
check by mistake, it may relieve itself of the responsibility in-
curred by acting with such promptness as to prevent any change
of circumstances on the part of the holder to his disadvantage -
but if it fails to do this and a loss must fall upon either the
bank or a holder for value, the bank must stand it to the ex-
tent of its undertaking : Farmers' and Mechanics' Bank, etc. v.
Butchers' and Drovers' Bank, 16 N. Y. 125; Irving Bank v.
Wetherald, 36 Id. 335 ; Bank of Bepublic v. Baxter, 31 Vt. 101 •
French v. Irwin, 4 Baxter 401 ; Second Nat' I Bank of Bal-
timore v. Western Nat' I Bank, 51 Md. 128; Hill v. Nat'l Trust
Company, 108 Pa. St. 1.

By whom checks may be certified. Certification being a con-

146 CERTIFICATION OF BANK CHECKS.

tract on the part of the bank, it may be entered into through
any of the methods by which a corporation makes contracts, as
by a vote of the board of directors or the stockholders, or by the
acts of a duly authorized agent. Almost universally it is
through the medium of an agent in the shape of one of
the bank officers or authorized employees, as the president,
cashier, or teller ; of these officers it is certain that the presi-
dent and cashier have this power, virtute officii, and, it would
seem, the teller also, on the theory that his office is simply part
of that of the cashier: Merchants' Bank v. State Bank, 10 Wall.
604 ; Girard Bank v. Bank of Penn Township, 39 Pa. St. 92 ;
Farmers' and Mechanics' Bank, etc., v. Butchers' and Drovers'
Bank, 16 N. Y. 125 ; Cooke v. State Nat' I Bank, 52 Id. 90.

All the above cases, and many more to be found in the New
York reports, uphold the proposition that whatever the actual
authority of the officer certifying may be, if he has been per-
mitted so to do by the bank, and no objection has been made,
the bank will be bound ; or if there is a general usage among
banks that a certain officer has pertaining to his office the duty
of certifying checks a bank will be bound by this usage to bona
fide holders. In Massachusetts alone it is believed a contrary
doctrine prevails, and, unless expressly granted to them, all
officers are there denied the power of thus binding the bank,
either by virtue of their office or from custom, the court hold-
ing that such a usage, even if established, would be bad : Mussey
v. Eagle Bank, 9 Mete. 306; Atlantic Bank v. Merchants'
Bank, 10 Gray 532. Some doubt may exist in Pennsylvania
also : Hill v. Nat' I Trust Company, 108 Pa. St, 1.

The authority may be given even to a clerk in the bank :
French v. Irwin, 4 Baxter 401. But the assistant cashier has
not authority to certify checks by virtue of his office, and in
the absence of proof of authority or of usage in the exercise of
it the bank cannot be held liable upon his certification, and the
burden of proof is upon the party asserting the liability to show
that such subordinate officer had this authority or that the bank
is estopped from denying it : Pope v. Bank of Albion, 57 N. Y.
126. This case, however, was decided differently by the Supreme
Court (59 Barb. 226), the bank being held liable, and the above
decision reversing the first judgment was by the Commission of

CERTIFICATION OF BANK CHECKS. 147

Appeals, which was almost equally divided in opinion, and on
the whole it does not seem to be entirely in accord with the
reasoning of Selden, J., in Farmers' and Mechanics' Bank, etc.,
v. Butchers' and Drovers' Bank, 16 N. Y. 125. In this latter
case the reason for departing from the Massachusetts rule is
stated to be that the act of certifying a check is not so much a
pledging of the credit of the bank as it is simply answering the
supposed inquiry of one about to take the check, whether the
bank has funds of the drawer to meet it, and that the duty of
answering such inquiries naturally pertains to the office of the
cashier, he being the custodian of the bank's funds. The lia-
bility of the bank upon the teller's certification is put expressly
upon the ground that the appointment of a teller is virtually a
division of the office of cashier, and it is difficult to see in what
respect the office of assistant cashier differs from that of teller,
both being divisions of the duties of cashier, and especially as
in most banks the assistant cashier actually performs about all
the duties of the cashier. From this it would seem that the
opinion of the Supreme Court in Pope v. Bank of Albion is
more in accord with the settled law of New York than is that
of the Commission of Appeals in reversing it. See also Hill v.
JSFat'l Trust Co., 108 Pa. St. 1.

Usage in connection with certification. We have seen that
banks are bound by a general usage which gives to certain
officers the power of certifying checks, and to an extent that in
the case of the president, cashier, and teller gives to these offices
the power virtute officii so far as holders for value are concerned,
and that in the case of subordinate officers the presumption is
they cannot bind the bank and the usage for them must be
proven. As the nature and meaning of the contract entered
into by the various parties on the certification of a check is
clearly defined by the law, the effect of it cannot be changed by
any evidence of a usage as to what it was understood to mean
among bankers : Security Bank v. Nat'l Bank, 67 N. Y. 458.
But a custom may exist among banks to certify checks for
certain purposes between themselves by which the certification
has not the meaning given to it in the ordinary mode of busi-
ness, and the banks will be bound by such custom even to an
extent of taking away the negotiability of the instrument:

148 CERTIFICATION OF BANK CHECKS.

Flour City Nat' I Bank of Rochester v. Traders' Nat'l Bank, 105
N. Y. 550. Evidence is properly rejected showing the existence
of a usage that a certification made in error could not be revoked
before new rights had been acquired on the faith of such certifi-
cation. Such a usage even if established would be so unreason-
able and unjust as to be void : Second Nat'l Bank of Baltimore
v. Western Nat'l Bank of Baltimore, 51 Md. 128.

In all respects banks will be governed by usages in the same
manner and to the same extent that other departments of busi-
ness are governed.

II. Rules applicable to a bank check that has been

CERTIFIED ON THE BEQUEST OP THE PAYEE OR SUBSEQUENT

holder. — There seems to be little or no controversy upon any
of the points under this portion of our subject. The result of
a certification obtained from the bank on the request of the
payee or subsequent holder is well summarized by Mr. Daniels,
who states it to be as follows: (l)"The bank becomes the
principal and only debtor; (2) the holder by taking a certifi-
cate of the check from the bank, instead of requiring payment,
discharges the drawer; (3) and the check then circulates as the
representative of so much cash in bank, payable on demand to
the holder :" 2 Dan. Neg. Inst. § 1601. These rules, of course,
are to be taken subject to the general principles illustrated by
the above citations.

The bank becomes the principal and only debtor. A check so
far resembles a bill of exchange that the bank by certification
becomes liable to the same extent as the acceptor of a bill ; but
the law goes a step further, and by discharging the drawer
makes the bank, not alone the principal, but the only debtor as
well. The transaction is in the nature of a novation by which
the creditor extinguishes the original debt and takes in lieu
thereof a new debt and a new debtor; and, as it is well settled
that the creditor cannot be compelled to take a third party as
his debtor without an express agreement to that effect, the
theory of the law is that by presenting a check for certification
instead of payment the holder thereby enters into such express
agreement. The drawer of a check undertakes that it shall be
presented for payment within a reasonable time, but not that it

CERTIFICATION OF BANK CHECKS. 149

is to be presented for acceptance and the money left in bank
still at his risk; and if it be so presented he is discharged
from liability and the bank is thus left the only debtor. The
bank is presumed to say to a holder presenting the check for
certification, "The check is good, the money is here, and you can
have it, but if you prefer us to keep it for you we will with-
draw it from the account of the drawer and keep it here solely
to meet your checks." And, as a matter of fact, the amount
called for in the check is thus transferred from the account of
the drawer to that of certified checks. By this transaction the
holder discharges the drawer and accepts the bank as his prin-
cipal and only debtor : Merchants' Bank v. State Bank, 10
Wall. 604; First Nat'l Bank v. Leach, 52 N. Y. 350;
Oirard Bank v. Bank of Penn Township, 39 Pa. St. 99; An-
drews v. German Nat'l Bank, 9 Heisk. 211 ; Nat'l Com-
mercial Bank v. Miller, 77 Ala. 168; Drovers' Nat'l Bank,
etc., v. Anglo-American, etc., Co., 117 111. 100 ; Simpson v. Pacific
M. L. Ins. Co., 44 Cal. 139. The New York reports abound
in cases announcing the same rule, and all the above have
become leading cases. See also Mussey v. Eagle Bank, 9 Mete.
306; Bank of Republic v. Baxter, 31 Vt. 101.

So long a3 the statute of limitations does not interfere, the
holder may sue the bank for the amount it certified for, even if
the funds of the drawer have been withdrawn or if he had none
there in the first place; as in one case, four years after the
check was certified, payment wa3 refused and the bank held
liable : French v. Irwin, 4 Baxter 404 ; and in another case,
seven years : Oirard Bank v. Bank of Penn Township, 39 Pa.
St. 92.

The bank is so far the primary debtor that it may be
reached by attachment or garnishee process in favor of a
creditor of the holder of a certified check : Bills et al. v.
Nat'l Park Bank, 89 N. Y. 343; Natl Commercial Bank
v. Miller, 77 Ala. 168.

The drawer cannot stop payment of a certified check. As to
him it is as though the check was paid at the time it was pre-
sented for certification : Freund et al. v. Importers' & Traders'
Nat'l Bank, 76 N. Y. 352.

TJie holder by getting a check certified thereby discharges the
Vol. XXXVL— 20

150 CERTIFICATION OF BANK CHECKS.

drawer and all previous indorsers. This proposition follows
from the preceding as a necessary corollary. There cannot be
two principal and only debtors, and as the bank has already
become such, the drawer must of necessity be discharged. As
it is nothing more nor less than a novation of contract in which
a new debtor is substituted, the rules pertaining to novation
must be followed, and one of the most indispensable is that the
original liability be extinguished. The citations of authority
made under the previous rule all maintain this further proposi-
tion as to the discharge of the drawer, and need not be here
repeated. See Simpson v. Pacific M. L. Ins. Co., 44 Cal. 139.

In regard to the indorsers, no case in point can be adduced,
but it follows, on all the principles of mercantile law, that any
conduct on the part of the holder of a check that discharges
the drawer will also discharge the indorsers. A passage in the
work of Mr. Daniel is in this respect calculated to mislead the
reader and announce a different rule : 2 Dan. Neg. lust. § 1604.
He says: "If the holder of a certified check indorse it, his
indorsee may hold him liable as well as the bank." This is
undoubtedly correct so far as an indorser subsequent to certifi-
cation is concerned, he becoming in that case simply a surety
for the bank; but the case cited by Mr. Daniel to support the
rule is based upon a wholly different proposition, and this fact,
in connection with the section in which it is cited, would seem
to imply that the indorser may be held in cases where the
drawer is discharged. The case relied upon is that of Mutual
Bank v. Rotgi, 28 La. Ann. 933, which was one where two
indorsers themselves had the check certified, and then deliv-
ered it to the holder, who presented it to the bank for payment,
and on its dishonor sued the drawer and indorsers. The court
decided only as to the liability of the indorsers. Not being a
case in which the check was presented for certification by the
payee, or subsequent holder, it was decided upon principles
wholly different from those now under discussion, and need not
be further noticed here.

A general rule for indorsers would seem to be that all those
whose names are on the check at the time it comes into the
hands of the holder will be discharged by his presenting it for
certification instead of for payment, while those who put their

CERTIFICATION OF BANK CHECKS. 151

names to the check after certification are to be treated as in-
dorsers of a promissory note, and discharged only under those
circumstances which discharge indorsers of promissory notes.
Before certification, the check is substantially a bill of ex-
change, and the drawer and indorsers are discharged by any
conduct of the holder that increases or prolongs their liability;
after certification the check is substantially a promissory note,
of which the bank is maker, and the maker and indorsers are
discharged by the rules governing negotiable promissory notes.
A certified check circulates as the representative of so much
cash in bank, payable on demand to the holder. This rule, too,
legitimately follows from the act of certification, the bank
thereby practically issuing its promissory note. Should the
check be indorsed in blank, or made payable to bearer, it might
be looked at as an ordinary bank note and governed by some
of the rules that pertain to bank notes. But probably the
nearest analogy is to be found in certificates of deposit, as the
certified check is nothing more or less than a certificate of de-
posit, payable on demand. The only difference that might
arise in a distinction of this kind would be in the application
of the statute of limitations ; and this, it is believed, can have
no effect in general. If, under any circumstances, a certified
check is to be treated as a bank note it is certain that the statute
of limitations can have no bearing on the liability of the bank,
whether demand for payment be made or not ; but if the check
is to be treated only as a promissory note, or a certificate of de-
posit, there may be some doubt; while the general rule seems
well settled that the statute of limitations does not begiu to run
against a certificate of deposit until its presentation for payment
and dishonor by the bank: Howell v. Adams, 68 N. Y. 314;
Hunger v. Albany City Nat'l Bank et al., 85 Id. 580 ; Bel-
lows Falls Bank v. Rutland County Bank, 40 Vt. 377 ; Fink-
bone's Appeal, 88 Pa. St. 368 ; Fells Point Savings Institution v.
Weedon, 18 Md. 320; Smiley v. Fry, 100 N. Y. 262; Lang v.
Strauss, 107 Ind. 94, following Smiley v. Fry, supra; McOough
v. Jamieson, 107 Pa. St. K. 336 ; Riddle v. First Nat'l Bank,
U. S. C. Ct., W. Dist. Pa., April 21, 1886, 27 Fed. E. 503.
There are cases that, holding certificates of deposit to be strictly
promissory notes, have applied to them the rule of promissory

152 CERTIFICATION OF BANK CHECKS.

notes, that is, when payable on demand they are due immediately,
and the statute begins to run from date : Brummagin v. Tallant,
29 Cal. 503; Tripp v. Curtinius, 36 Mich. 494; Curran v.
Witter, 68 Wise. 16; and see also Hunt v. Devine, 37 111.,
137; Gregg etal.v. Union County Nat'l Bank, 87 Ind. 238.
Tripp v. Curtinius has been disaj>proved in Birch v. Fisher, 51
Mich. 36, the court saying that were it an open question, they
would be inclined to follow the New York rule; and it is
hardly probable that this view will be taken in States where the
question has not as yet been passed upon. (But see Curran v.
Witter, supra?)

The only State that has as yet passed directly on the statutes
of limitations in connection with certified checks is Pennsylva-
nia; and it was there held that the statute did not commence
to run until demand for payment had been made, and the check
dishonored : Girard Bank v. Bank of Penn Township, 39 Pa, St.
92. As showing the similarity between certified checks and
certificates of deposit, this case was held authority for applying
the same rule to certificates of deposit : Finkbonc's Appeal, 86
Pa. St. 368. But in Michigan the reason for holding that de-
mand need not be made in the case of a certificate of deposit
to enable the statute to commence to run, was put expressly upon
the ground that in this respect it differed from a certified check,
and it therefore declined to follow the Pennsylvania case:
Tripp v. Curtinius, 36 Mich. 494.

From these decisions, the rule would appear to be certain
that the statute of limitations does not begin to run on a certi-
fied check until presentment and dishonor ; those States apply-
ing this rule to certificates of deposit extending it to certified
checks, and those holding to the contrary in regard to certificates
of deposit making a distinction in favor of certified checks.

III. — Rules applicable to a bank check that has

BEEN CERTIFIED ON THE BEQUEST OF THE DRAWEE. — Some

of our text writers and annotators have failed to make any dis-
tinction between checks certified on the request of the payee and
those certified on the request of the drawer ; and so have cited
cases as conflicting which are really in entire accord : Morse,
Banks and Banking, 311 ; notes to Andrews v. German Nat'l

CEKTIFICATION OF BANK CHECKS. 153

Bank, 24 Am. Rep. 300 ; Mutual Nat'l Bank v. Rotgt, 26 Id. 1 26 ;
French v. Irwin, 27 Id. 769. The judicial decisions show, how-
ever, that so clearly and radically do they differ that no case in
which the question of a difference ever arose has failed to make
the distinction. In general a check certified on the request of
the drawer and by him delivered to the holder does not differ
from an uncertified check so far as -the rules of presentment,
payment, dishonor, notice, and acceptance are concerned ; but
some of the rules in connection with it require attention.

The bank becomes primarily liable to the payee and subsequent
holders. While the exact position of the bank upon the certifi-
cation of a check at the request of the drawer has never been
defined, there can be no question as to its being practically the
same as though the check had been presented for certification by
the payee. In both cases the bank occupies the position of an
acceptor of a bill and is the primary debtor, and in this one case
the only debtor.

Such a check differs from one that is uncertified in that there
can arise none of the disputed questions as to the liability of the
bank to a holder who has presented the check for payment and
been refused ; and as to whether the giving of a such a check by
the drawer is an assignment of the funds drawn upon. It would
seem clear that the principles underlying the loss of certified
checks would cause such a check to be an assignment of the
funds drawn upon and place them beyond the reach of the
creditors of the drawer ; and such appears to be the view of the
Alabama Supreme Court : Nat'l Commercial Bank v. Miller, 77
Ala. 168. But so long as the check remains in the hands of or
under the control of the drawer the fund has not been assigned
and may be reached by his creditors : Bills et al. v. Nat'l Park
Bank of N. Y, 89 N. Y. 343 ; Gibson et al. v. Nat'l Park Bank
ofN. Y, 98 Id. 87.

The drawer and indorsers are not discharged except by such
acts of the holder as would discharge the drawer and indorsers of
an uncertified check. This rule is so open to misapprehension
that we will notice more in detail the various cases which have
passed upon it. The only judicial authority that can by any
possibility be construed to controvert it is a dictum of Hunt, J.,
in First Nat'l Bank of Washington v. Whitman, 94 U. S. 343.

154 CERTIFICATION OF BANK CHECKS.

It is there stated rather broadly that no difference by whom the
certification is obtained, the effect of the contract is the same;
but an examination of the case will show that the question of
certification was not before the court at all, so that all that was
said upon it was obiter. And the learned judge only intended
by this to say that no matter by whom the certification is ob-
tained, the liability of the bank is the same, that being the
point he was illustrating — a proposition that is undoubted.

The principle upon which the drawer of a check is discharged
when the payee, instead of having the check paid, takes in lieu
thereof the certificate of the ban k, has already been noted ; but,
as said by Peckham, J., in the leading New York case, "this
would not discharge the drawer of a check who himself procured
it to be certified, and then put it in circulation ; the reason of the
rule fails to apply to him in such case." The undertaking of
the drawer in such case is the same as though the check were
uncertified, namely, that the bank will pay the check when pre-
sented for payment ; and until such presentment is made this
undertaking is not broken; and it is not affected at all by the
previous agreement of the bank with the drawer that the check
will be so paid. So that if the payee in the due course of busi-
ness presents his check for payment and is met with a dishonor
there can be no reason for denying him his remedy against the
drawer. Were this not true certified checks might in many in-
stances be a more uncertain security than those that are uncerti-
fied ; for should the bank happen to fail before the payee had
time to present his check in the due course of business and the
drawer held to be discharged, the payee would have no remedy
whatever.

But we are not without abundant judicial authority to show
that this reasoning is sound. The earliest case passing upon the
point is that oiBickford v. First Nat'l Bank, 42 111. 238, decided
in 1886, in which a very able opinion is delivered by Bruse, J.
The case was decided before the subject of certified checks had
come under judicial notice to any great extent, and, in conse-
quence, the language is somewhat general and may be applied to
certifications of both kinds, as, perhaps, too, was intended by the
learned judge at the time. The facts were that the check bad
been certified on the request of the drawer and the court held

CERTIFICATION OF BANK CHECKS. 155

that the bank thereby became primarily liable ; but also held
that the secondary liability of the drawer was not thereby re-
leased. Beyond the exact point decided, the case will probably
not be deemed authority even in Illinois, as the general lan-
guage used will not be held to apply to checks certified on the
request of the payee, in view of the subsequent development of
the law on the subject. This case has been followed in the same
State and the same point decided by the courts of other States
until its correctness is not to be questioned : Rounds v. Smith et
al, 42 111. 245; Brown v. Leskie, 43 Id. 500; Andrews v. Ger-
man Nat'l Bank, 9 Heisk. 21 1 ; First Nal'l Bank v. Leach, 52
N. Y. 350 ; Thomson et al. v. Bank of British America, 82 Id.
1 ; Mutual Nat'l Bank v. Rotg&, 28 La. An. 933 ; Essex County
Natl Bank v. Bank of Montreal, 7 Bissell 193. la illustration
of the inherent justness of the rule itself and the equitable basis
upon which all the rules of the law merchant rest, it is to be
noted that these cases were nearly all decided within a few years
of one another and the decisions of the courts were not had by
one another, so that the cases represent the independent judg-
ments of different tribunals arriving at the same conclu-
sions.

The New York cases afford us the best illustration of the
distinction between the two classes of certified checks. Iu First
Nat'l Bank v. Leach, Peckham, J., recognized the distinc-
tion and pointed it out in his opinion ; but so far as holding the
drawer to any liability, when the check had been certified on his
request, this remained a dictum until Thomson v. Bank of British
America was decided. In this case, Sedgewick, J., delivered
an able opinion, while it was in the Superior Court of the city
of New York, forcibly and clearly presenting the distinction
and overruling counsel's reliance on the dictum of Hunt, J. :
Thomson et al. v. Bank of British America, 45 N. Y. Superior
Ct. 1, and this opinion on review was affirmed by the Court of
Appeals : Thomson et al. v. Bank of British America, 82 N. Y.
1. The same principles have been followed in subsequent cases :
Bills et al. v. Nat'l Park Bank of N. Y, 89 N. Y. 343 ; Gibson
et al. v. Nat'l Park Bank of N. Y, 98 Id. 87.

The Louisiana case was one in which two indorsers had the
check certified and then gave it to the holder ; but there can be

156 CERTIFICATION OF BANK CHECKS.

no difference in principle between such a case and the others
above cited : Mutual Nat'l Bank v. Eotgi, 28 La. An. 933.

The check circulates as the representative of so much cash in
bank, payable on demand to the holder, with the drawer as surely.
In this respect there is little difference between the two classes
of certified check, each kind being in effect promissory notes of
the bank and with this fact giving them currency. But the
check upon which the drawer remains liable is better security
than the one for liability upon which he is discharged, as it has
his promise to pay in addition to that of the bank. This lia-
bility of the drawer, however, might not continue long enough
to enable the check to circulate as money to any great extent;
for if the holder be guilty of laches, by which the drawer is
made to suffer, he cannot recover of him, the rule in such cases
being the same as though the check were uncertified.

For any other questions that may arise in connection with
certified checks it is believed the rules applicable to bills of
exchange and uncertified checks will furnish easy solutions.

W. H. Bryant.

Denver, Col.

RECENT AMERICAN DECISIONS.

Supreme Court of Pennsylvania.

ROMMEL v. SCHAMBACHER.

The proprietor of an inn or tavern is responsible for a personal injury done
to a guest by another guest who had been suffered by the proprietor to remain
on the premises in a state of intoxication.

Error to the Court of Common Pleas, No. 4, of Philadelphia
county.

The facts sufficiently appear in the opinion.

Henry D. Wtreman, for plaintiff, in error.

Charles H. Downing, for defendant in error.

The opinion of the court was delivered by

Gordon, C. J. — From the evidence in this case we gather
the following facts: On the evening of the 9th of August, 1884,
the plaintiff, William Rommel, a minor, entered the tavern of